Telenor Secured Reduction in Indian Mobile License Fees
Published on: 6th Apr 2014
By: Ian Mansfield
Telenor has secured a reduction in the license fees it was due to pay for its Indian joint venture as a consequence of the cancellation of the controversial 2008 GSM licenses.
On 31 March 2014, Indian authorities confirmed that Telenor's Indian subsidiary Telewings will be granted an offset of the entry fee of INR 16.6 billion (USD283 million) paid by Unitech Wireless in 2008 against the remaining installments on the payable bid amount on spectrum acquired by Telewings in 2012.
That benefit was agreed in principle last October, but was to be applied only to companies that didn't have any criminal proceedings stemming from the award of the 2008 licenses.
Telenor said that the one-time effect of the licence offset will be recognized in Telenor's Q1 results as Other income. In addition, there is a positive effect on net financial items of INR 1.7 billion (USD33 million) as accrued interest is reduced following the reduction of the licence debt.
These effects are partly offset by a deferred tax expense of INR 5.6 billion (USD100 million). The cash effects from the granted offset will occur in connection with the remaining installments, scheduled for 2015-2024.